COMPLETION CAPITAL COMMITMENT
COMPLETION CAPITAL COMMITMENT (this "Commitment") dated as of June 3,
1999, between RIVIERA HOLDINGS CORPORATION, a Nevada corporation ("Xxxxxxx
Holdings"), and RIVIERA BLACK HAWK, INC., a Colorado corporation (the
"Company").
RECITALS
A. First Mortgage Notes. The Company has issued $45,000,000 aggregate
principal amount of 13% First Mortgage Notes due 2005 With Contingent Interest
(together with all notes issued in exchange or replacement therefor, the
"Notes") pursuant to an Indenture (as amended, supplemented or otherwise
modified from time to time, the "Indenture") dated as of the date hereof between
the Company and IBJ Whitehall Bank & Trust Company, a New York banking
association, as trustee (the "Trustee"), for the benefit of the holders from
time to time (the "Holders") of the Notes.
B. Proceeds of the Notes. The Company will use the proceeds of the
Notes for the development, construction, equipping and operation of the Riviera
Black Hawk (as defined in the Indenture) upon certain real property located in
Black Hawk, Colorado (the "Property") and for certain other purposes described
in the Indenture.
C. Riviera Holdings' Benefit. The Company is a wholly-owned subsidiary
of Riviera Holdings and, as a result, Riviera Holdings will significantly
benefit from the construction and operation of the Riviera Black Hawk.
D. Material Inducement. It is a condition precedent and material
inducement to the purchase of the Notes that (1) Riviera Holdings and the
Company shall have executed and delivered this Commitment whereby Riviera
Holdings has agreed that it will commit, subject to the limitations set forth
herein, for the benefit of the Company and the Holders, to make capital
contributions to the Company upon the terms, conditions and limitations provided
herein, (2) the Company shall have executed the Collateral Assignment assigning
this Commitment, among other things, to the Trustee, and (3) Riviera Holdings
shall have executed and delivered the Consent to Collateral Assignment of
Completion Capital Commitment pursuant to which, among other things, Riviera
Holdings consents to the Company's assignment of this Commitment to the Trustee.
E. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in the Indenture.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Riviera Holdings and the Company hereby agree as follows:
1. Funding Amounts. Upon the occurrence of each Contribution Event (as
defined below), Riviera Holdings shall pay, after receipt of the notice
described in Sections 3 or 4 below, the applicable Funding Amounts (as defined
below) into the Construction Disbursement Account for disbursement in accordance
with the Cash Collateral and Disbursement Agreement. For the purposes of
Sections 2(i), 2(ii) and 2(iii) below, the "Funding Amounts" shall be equal to
the amount in immediately available cash determined by the Independent
Construction Consultant, based upon the Construction Disbursement Budget, to be
necessary to cause a Contribution Event to no longer exist; provided, however,
that in no event shall the aggregate amount of all Funding Amounts paid pursuant
hereto exceed $10,000,000; provided, further, that for purposes of Sections
2(iv), 2(v) and 2(vi) below, the Funding Amounts shall be equal to the
difference between $10,000,000 and the aggregate Funding Amounts, if any,
previously paid under Section 2. Such proceeds shall be used for the
development, construction, equipping and operations of the Riviera Black Hawk
pursuant to the terms of the Indenture, the Cash Collateral and Disbursement
Agreement and the other Collateral Documents.
2. Contribution Event. A "Contribution Event" means any of the
following: (i) there are insufficient Available Funds (as defined in the Cash
Collateral and Disbursement Agreement) to complete the development,
construction, equipping and opening of the Riviera Black Hawk so that it is
Operating by the Operating Deadline; (ii) the Company has provided the Trustee
and the Independent Construction Consultant with a written notice that it is
unlikely that there shall be sufficient Available Funds to complete the
development, construction, equipping and opening of the Riviera Black Hawk so
that it is Operating by the Operating Deadline; (iii) (a) the Independent
Construction Consultant has provided the Trustee and the Company with a written
notice that it is unlikely that there will be sufficient Available Funds
(excluding any Additional Revenues (as defined in the Cash Collateral and
Disbursement Agreement)) to complete the development, construction, equipping
and opening of the Riviera Black Hawk so that it is Operating by the Operating
Deadline and (b) within ten days of the Company receiving notice described in
clause (a) above, the Company has not provided evidence satisfactory to the
Independent Construction Consultant that there shall be sufficient Additional
Funds (including the amount of Additional Revenues) to complete the development,
construction, equipping and opening of the Riviera Black Hawk so that it is
Operating by the Operating Deadline; (iv) the Riviera Black Hawk is not
Operating by the Operating Deadline; (v) the commencement of any voluntary
bankruptcy case by the Company on or prior to May 31, 2000; or (vi) the
commencement of an involuntary bankruptcy case against the Company which is not
dismissed, bonded or discharged on or prior to the earlier of (A) 60 days after
the commencement and (B) May 31, 2000, or (3) the entry of an order for relief
against the Company prior to May 31, 2000, under any bankruptcy law in effect at
any time.
3. Independent Construction Consultant Certificate. Upon the
occurrence of each Contribution Event occuring under Sections 2(i), 2(ii) and
2(iii) above (after, with respect to Section 2(iii) only, the expiration of the
ten day period set forth in subsection (b) thereof), the Independent
Construction Consultant shall provide the Company and Riviera Holdings with
written notice setting forth its determination of the Funding Amounts required
to be contributed to the Company pursuant to Section 1 hereof with respect to
such Contribution Event and the basis of its determination.
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4. Company's Certificate. Upon the occurrence of each Contribution
Event occuring under Sections 2(iv), 2(v) and 2(vi) above, the Company shall
provide written notice to Riviera Holdings of such Contribution Event setting
forth its determination of the Funding Amounts required to be contributed to the
Company pursuant to Section 1 hereof with respect to such Contribution Event and
the basis of its determination.
5. Cooperation. In connection with this Agreement, Riviera Holdings
agrees, at its sole cost and expense, to fully cooperate with the Company and to
timely provide such documents, agreements and information as may be required in
connection herewith.
6. Ability to Comply With This Agreement. Riviera Holdings shall, at
all times prior to the fulfillment of all of its obligations under this
Agreement, ensure that it has the ability to fulfill all of such obligations
under all other agreements to which it is a party, including the Indenture dated
as of August 13, 1997, among Riviera Holdings, the subsidiary guarantors
identified therein and Norwest Bank Minnesota, National Association, as trustee,
relating to the issuance of $175,000,000 principal amount of 10% First Mortgage
Notes due 2004 of Riviera Holdings.
In addition, Riviera Holdings shall not, at any time prior to the
fulfillment of all of its obligations under this Agreement, permit any other
agreement to which it is a party to in any way prohibit or interfere with its
ability to fulfill its obligations under this Agreement.
7. Alteration of Obligations. Riviera Holdings acknowledges and agrees
that none of the following shall release, impair, reduce, diminish or otherwise
affect Riviera Holdings' obligations under this Commitment: (i) any alteration,
compromise, acceleration or extension of, or any change to, (a) the Company's
obligations to complete the development, construction and equipping of the
Riviera Black Hawk and to commence operation thereof or (b) the payment or
performance by the Company or any guarantor under any debt instrument or other
financing for the development, construction, equipping or operation of the
Riviera Black Hawk (the foregoing, collectively, the "Obligations"), in each
case in such manner, upon such terms and at such times as any Person (including,
without limitation, the Trustee or any Holder) (each such Person, an "Obligee")
deems best, and without notice to Riviera Holdings; (ii) the release of the
Company or any guarantor from any or all of the Obligations by acceptance of a
deed in lieu of foreclosure or otherwise, as to all or any portion of the
Obligations; (iii) the release, substitution or addition of any one or more
guarantors or endorsers of the Funding Amounts or the Obligations; (iv) the
acceptance of additional or substitute security for the Funding Amounts or the
Obligations; or (v) the release or subordination of any security for the Funding
Amounts or the Obligations. No exercise (including, without limitation,
foreclosure of the Property) or non-exercise of any right under any document
relating to the Obligations (collectively, the "Obligation Documents") by an
Obligee, no dealing by an Obligee hereunder or under any Obligation Document or
any other document with Riviera Holdings, the Company or any other guarantors or
any other Person, and no change, impairment or release of all or any portion of
the Funding Amounts or the Obligations or suspension of any right or remedy of
an Obligee against any other Person, including, without limitation, the Company
or any other such guarantor, endorser or other Person, shall in any way affect
any of the obligations of Riviera Holdings hereunder or any security furnished
by Riviera Holdings or give Riviera Holdings any recourse against an Obligee
(including, without limitation,
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the Trustee). If an Obligee has exculpated or hereafter exculpates the Company
from liability in whole or in part, or has agreed or hereafter agrees to look
solely to the Property or any other property for the satisfaction of the
Company's Obligations (including, without limitation the Company's obligations
under the Indenture, the Notes or any Collateral Document), such exculpation and
agreement shall not affect the obligations of Riviera Holdings hereunder.
Riviera Holdings further acknowledges that any such exculpation or agreement
that has been given or that is hereafter given to the Company with respect to
the Notes, the Indenture or any Collateral Document has been given or is given
in reliance upon the covenants of Riviera Holdings contained herein.
8. Obligations Absolute; Waiver. The obligations of Riviera Holdings
hereunder shall be unconditional (except as to any condition set forth under
Sections 1 and 2), absolute and continuing and, without limiting the generality
of the foregoing, shall not be released, discharged or otherwise affected by and
shall survive, and Riviera Holdings hereby waives and relinquishes all rights
and remedies accorded by applicable law to sureties or guarantors and agrees not
to assert or take advantage of any such rights or remedies, including, without
limitation, (a) any right to require any holder or recipient of the benefit of
any of the Obligations (including, without limitation, the Trustee or the
Holders) (each a "Benefited Party") to proceed against the Company or any other
Person or entity or to proceed against or exhaust any security held by a
Benefited Party at any time or to pursue any other remedy in the power of a
Benefited Party before proceeding against Riviera Holdings; (b) the defense of
the statute of limitations in any action hereunder or in any action for the
collection or performance of the Funding Amounts or the Obligations; (c) any
defense that may arise by reason of the incapacity, lack of authority, death or
disability of any other Person or the failure of a Benefited Party to file or
enforce a claim against the estate (in administration, bankruptcy or any other
proceeding) of any other Person; (d) appraisal, valuation, stay, extension,
marshaling of assets, redemption, exemption, diligence, demand, presentment,
protest and notice of any kind, including, without limitation, notice of the
existence, creation or incurring of any new or additional indebtedness or
obligation or of any action, non-action, performance or failure to perform on
the part of a Benefited Party, the Company, any endorser or creditor of the
Company or Riviera Holdings or on the part of any other Person under this or any
other instrument in connection with any obligation or evidence of indebtedness
held by a Benefited Party as collateral or in connection with the Funding
Amounts or the Obligations; (e) any defense based upon any exercise of remedies,
including without limitation, foreclosure of the Property, or upon an election
of remedies by a Benefited Party, including, without limitation, an election to
proceed by non-judicial rather than judicial foreclosure, which destroys or
otherwise impairs the subrogation rights of Riviera Holdings, the right of
Riviera Holdings to proceed against the Company or any other person for
reimbursement, or both; (f) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal; (g) any duty
on the part of a Benefited Party to disclose to Riviera Holdings any facts a
Benefited Party may now or hereafter know about the Company or any other Person,
regardless of whether a Benefited Party has reason to believe that any such
facts materially increase the risk beyond that which Riviera Holdings intends to
assume, or has reason to believe that such facts are unknown to Riviera
Holdings, or has a reasonable opportunity to communicate such facts to Riviera
Holdings, since Riviera Holdings acknowledges that Riviera Holdings is fully
responsible for being and keeping informed of the financial condition of the
Company or any other Person and of all
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circumstances bearing on the risk of non-payment of any Funding Amounts; (h) any
defense arising because of the election of a Benefited Party, in any proceeding
instituted under the Federal Bankruptcy Code, of the application of Section
1111(b)(2) of the Federal Bankruptcy Code; (i) any defense based upon any
borrowing or grant of a security interest under Section 364 of the Federal
Bankruptcy Code; (j) any claim or other rights which it may now or hereafter
acquire against the Company or any other Person that arises from the existence
or performance of Riviera Holdings' obligations under this Commitment or any
other Obligation Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, any
right to participate in any claim or remedy by a Benefited Party against the
Company or any collateral which a Benefited Party now has or hereafter acquires,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, by any payment made hereunder or otherwise, including,
without limitation, the right to take or receive from the Company or any other
Person or entity, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim or
other rights; (k) any rights which it may acquire by way of contribution under
this Commitment or any Obligation Document, by any payment made hereunder or
otherwise, including, without limitation, the right to take or receive from any
other Person, directly or indirectly, in cash or other property or by set-off or
in any other manner, payment or security on account of such contribution rights;
(l) any defense based on one-action laws and any other anti-deficiency
protections granted to guarantors by applicable law; (m) any merger or
consolidation of the Company into or with any other Person, or any sale, lease
or transfer of any or all of the assets of the Company to any other Person; (n)
any circumstance which might constitute a defense available to, or a discharge
of, the Company, Riviera Holdings or a surety; (o) any lack of genuiness,
validity, regularity, enforceability or value of any Funding Amounts, this
Commitment or any Obligation Document; and (p) any other fact or circumstance,
including, without limitation, any construction delays or any contests or claims
relating to the construction of the Riviera Black Hawk. Any proceeds of a
foreclosure or similar sale may be applied first to any obligations of the
Company that do not also constitute Funding Amounts or Obligations. Riviera
Holdings acknowledges and agrees that any nonrecourse or exculpation provided
for in any Obligation Document, or any other provision of an Obligation Document
limiting each respective Benefited Party's recourse to specific collateral or
limiting such Benefited Party's right to enforce a deficiency judgment against
the Company, shall have absolutely no application to Riviera Holdings's
liability under this Commitment. To the extent that any Benefited Party
(including, without limitation, the Trustee) collects or receives any sums or
payments from the Company or from any guarantor, endorser or other Person under
any Obligation Document or realized from any security, such Benefited Party
shall have the right, but not the obligation, to apply such amounts first to
that portion of the Company's indebtedness and obligations, if any, to such
Benefited Party that is not covered by this Commitment, regardless of the manner
in which any such payments or amounts are characterized by the Person making
payment. Nothing herein shall be construed to be a waiver by Riviera Holdings of
any defense based on the occurrence or non-occurrence of a Contribution Event or
as to the Funding Amount.
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9. Bankruptcy and Related Proceedings. The obligations of Riviera
Holdings under this Commitment shall not be altered, limited or affected by or
as a result of any action taken by the Company in any proceeding, voluntary or
involuntary, involving the bankruptcy, reorganization, insolvency, receivership,
or liquidation of the Company, or by any defense which the Company may have by
reason of any order, decree or decision of any court or administrative body
resulting from any such proceeding.
10. Interest. If Riviera Holdings fails to pay all or any portion of
the Funding Amounts in accordance with the provisions hereof, the amount of such
Funding Amounts and all other sums payable by Riviera Holdings hereunder shall
bear interest from the date of demand at the highest rate applicable to the
principal balance of the Notes.
11. Independent Obligations. The obligations of Riviera Holdings
hereunder are independent of the obligations of the Company or any other Person,
and, in the event of any default hereunder, a separate action or actions may be
brought and prosecuted against Riviera Holdings, whether or not the Company or
such other Person is joined therein or a separate action or actions are brought
against the Company.
12. Notices. Whenever Riviera Holdings or the Company shall desire to
give or serve any notice, demand, request or other communication with respect to
this Commitment, each such notice shall be in writing and shall be effective
only if the same is delivered by hand-delivery, first-class mail (registered or
certified, return receipt requested), telecopier or air courier guaranteeing
overnight delivery, addressed as follows:
To Riviera Holdings:
Riviera Holdings Corporation
0000 Xxx Xxxxx Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Executive Vice President of Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Company:
Riviera Black Hawk, Inc.
000 Xxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxx 00000
Attention: Executive Vice President of Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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and, in either case, with a copy to the Trustee at:
IBJ Whitehall Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any such notice delivered personally shall be deemed to have been received upon
delivery. Any such notice sent by telegram shall be presumed to have been
received by the addressee one business day after its acceptance for sending by
an authorized carrier thereof. Any such notice sent by mail shall be presumed to
have been received by the addressee three business days after posting in the
United States mail. Riviera Holdings or the Company may change its address by
giving the other and the Trustee a written notice of the new address as herein
provided.
13. Successors and Assigns. This Commitment shall inure to the benefit
of the Company, its successors and assigns, and shall bind the successors and
assigns of Riviera Holdings.
14. Termination. This Commitment shall expire upon the later of (i)
the final disbursement of amounts in the Cash Collateral Accounts in accordance
with the Cash Collateral and Disbursement Agreement and (ii) May 31, 2000.
15. No Guarantee. Nothing contained in this Commitment shall be deemed
to be a guarantee by Riviera Holdings of any obligations of the Company under
the Notes.
16. Miscellaneous Provisions.
16.1 This Commitment shall be governed by and construed in
accordance with the laws of the State of New York. Riviera Holdings
hereby consents to the jurisdiction of the courts of the State of New
York and consents to service of process by any means authorized by New
York law in any action brought under or arising from this Commitment.
16.2 Riviera Holdings acknowledges that it is aware of the
Indenture entered into by the Company and the Trustee, the Notes
issues thereunder and the Collateral Documents executed in connection
therewith and is generally familiar with the terms and provisions
thereof.
16.3 This Commitment shall constitute the entire agreement of
Riviera Holdings with the Company with respect to the subject matter
hereof, and no representation, understanding, promise or condition
concerning the subject matter hereof shall be binding upon the Company
unless expressed herein.
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16.4 Should any term, covenant, condition or provision of this
Commitment be determined to be illegal or unenforceable, all other
terms, covenants, conditions and provisions hereof shall nevertheless
remain in full force and effect.
16.5 When the context and construction so require, all words used
in the singular herein shall be deemed to include the plural, the
masculine shall include the feminine and neuter, and vice versa.
16.6 No provision of this Commitment or right granted to the
Company hereunder can be waived in whole or in part, nor can Riviera
Holdings be released from its obligations hereunder, except by a
writing duly executed by an authorized officer of the Company.
16.7 The headings of this Commitment are inserted for convenience
only and shall have no effect upon the construction or interpretation
hereof.
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties have executed this Commitment as of
the date first written above.
RIVIERA HOLDINGS CORPORATION,
a Nevada corporation
By:
--------------------------
Name:
Title:
RIVIERA BLACK HAWK, INC.,
a Colorado corporation
By:
--------------------------
Name:
Title:
[Signature Page to Completion Capital Commitment]
